A blog for passing time, and passing messages about media, about media ecology which is the study of media environments, about language and symbols, about technology, about communication, about consciousness, about culture, about life and the universe, about everything and nothing, about time...

Monday, December 23, 2013

Nonlinear TV

So, this seems to come up over and over, as we are in a period of transition in regard to our media environment, moving away from a broadcast model. You know, the term broadcast is an agricultural metaphor, a word originally referring to a method of planting seeds by casting them broadly.

In its newly updated "long-term view," Netflix made it clear that it has ambitious plans for the future. "It's throwing the gauntlet down," said Quinnipiac University professor David Cadden. "Netflix has proven to be a technologically innovative company. Essentially, it's informing HBO, Amazon and the major networks that it's moving into the field of content production."

The report then begins in earnest:

Netflix on Monday updated its "long-term view" of the industry to include a far wider range of competitive factors than it has ever had in the past. The company also adjusted its competitive focus accordingly, taking into account a number of players that it had previously ignored.
In a nutshell, the company said in its statement for investors, it expects that Internet TV will replace linear TV over the coming decades and around the world.
Also, it continued, "apps will replace channels, remote controls will disappear and screens will proliferate."
In this brave new world, of course, Netflix plans to be the leading provider.

I agree with this assessment, of course. I think there will still be a place for broadcast, we will still want live reports for news and weather and sports, for example, and there can be live events and even premieres based on the desire to be the first to view the programming. But for the most part, on-demand services, subscriptions, and pay-per-view will be the future of audiovisual media.Now, the article continues with a new section entitled, "HBO Leads the List":

Netflix got into a significant level of detail explaining why it was predicting these trends. For shareholders, though, the main point was this: Because Internet TV would be the driving force, most of the world's leading linear TV networks, such as HBO and ESPN, will or are already moving into Internet.These are the providers Netflix sees as its main competitors now—not Hulu and not even Amazon, at least on a primary level. To be sure, Hulu and Amazon are still on the list of competitors; they are just not at the top of the list."The network that we think likely to be our biggest long-term competitor-for-content is HBO," the company said. "In addition to HBO, there are Amazon/Lovefilm/Prime, Hulu, Now TV, and many cable and broadcast networks in various territories."Netflix did not respond to our request for further details.

I'll just add that this represents a kind of convergence, just as say Microsoft, Google, and Facebook once operated in very different markets and now find themselves going head-to-head with each other, along with Apple which has led the way in breaking down business boundaries. And speaking of breaking, the next section of the article is entitled "'They Are Breaking New Ground'":

By singling out HBO, Netflix is sending a message not only to HBO but to the rest of the market as well. It is saying, essentially, that it is no longer just a provider of existing content. Instead, it sees itself increasingly as a creator of content as well.This may seem like big talk for a company that has only produced a handful of original shows, including Lilyhammer, House of Cards, Hemlock Grove, Arrested Development Season 4 and Orange is the New Black.Even from this small base, however, Netflix has been very strategic with its offerings, Val Wright, principal at Val Wright Consulting, told the E-Commerce Times."It used analytics to match that customers who loved the original House Of Cards also loved Kevin Spacey and used that to cast the leading actor for their original series remake," she said. "They are breaking new ground with business models and customer experience."

So Netflix is getting aggressive, but then again its origin is in taking on what was once a blockbuster business of video rentals, beginning with videocassettes, and later with DVDs. It follows that the next section of the report is entitled, "'It's Throwing the Gauntlet Down'":

Netflix makes clear that it does not plan to let up."We'll continue to grow our original content as we gain scale, confidence and experience," it said in its update. "With each original, we learn more about what our members want, about how to produce and promote effectively and about the positive impact of originals on our brand."Netflix's chutzpah is impressive, said David Cadden, a professor of entrepreneurship and strategy at Quinnipiac University."It's throwing the gauntlet down," Cadden told the E-Commerce Times. "Netflix has proven to be a technologically innovative company and one that is able to bounce back from self-inflicted errors Essentially, it's informing HBO, Amazon and the major networks that it's moving into the field of content production."

Chutzpah, I like that! As for the separation of carrier from content in telecommunications policy, it's not exactly like the separation of church and state in the constitution, it's a kind of boundary set up by various forms of legislation, and subject to Federal Communications Commission oversight. Put simply, there is no necessary reason to keep carrier and content separate, there is only the question of what best serves the public interest (and the FCC is supposed to act in support of the public interest, it ought to but often doesn't). Of course, from a media ecology point of view, you'd have to say that the carrier is the content.Anyway, continuing on the theme of Netflix rising, the next section of the piece is entitled, "'The Shot Across the Bow'" and it features a quote from someone near and dear to all our hearts here at Blogtime Passing:

HBO appears to have already recognized the nascent competitive threat that Netflix poses.Not so long ago, Netflix was seen as existing in a symbiotic relationship with cable channels and networks, noted Lance Strate, a professor of communication and media studies at Fordham University."Viewers who previously would write off a program because they missed earlier episodes or seasons would catch up by watching them on Netflix, which would increase viewership for the current episodes on cable," Strate told the E-Commerce Times.Now it's HBO that sees it must push into the on-demand format."HBO GO is the shot across the bow, turning the cable channel into a direct competitor with Netflix," Strate explained. "Netflix's modified vision statement reflects the new reality where the cable networks are positioning themselves in competition with, rather than complementing Netflix as an online content provider."

So, we really have a number of players converging on the same territory, new media-based companies such as Netflix, Apple, and Amazon, content providers such as HBO, Showtime, and Starz, and also carriers such as TimeWarner Cable, Cablevision, Comcast, Verizon, AT&T, etc., which provide broadcast and internet services and will be forced to adopt more of the a la carte model in order to stay competitive.Anyway, it is certainly to the point that the options available to audiences are on the rise, as indicated by the final section of the article, "Numerous Hardware Options":

Demographics and changes in the marketplace make these shifts inevitable, said TubeStart CEO Josef Holm."More young people view online video than they do cable TV, and smartphones have made this trend even more ubiquitous," Holm told the E-Commerce Times."The increasing number of hardware options plays a role too," he added, pointing to Google's Chromecast as one example.

So, as the media environment continues to evolve, entrepreneurs will find new niches, established businesses will scramble to keep up, and government will be looking through the rearview mirror and continue to respond to problems that appear long after the fact. And of course it's only television, but there is also a larger issue here, a point made by Marshall McLuhan long ago, that the absence of an understanding and application of the media ecology approach leads to enormous waste of resources. In the meantime, excuse me while I catch up on some movies and programs on my iPad...